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FII / NRI / PIO Investment in Indian Company

Ozg Regulatory Consultant

Email: regulatory.consultant@ozg.co.in

Regulations

Foreign
Institutional Investors (FIIs), Non-Resident Indians (NRIs), and Persons of Indian
Origin (PIOs) are allowed to invest in the primary and secondary capital markets
in India through the portfolio investment scheme (PIS). Under this scheme, FIIs/NRIs
can acquire shares/debentures of Indian companies through the stock exchanges
in India.

The ceiling
for overall investment for FIIs is 24 per cent of the paid up capital of the Indian
company and 10 percent for NRIs/PIOs. The limit is 20 per cent of the paid up
capital in the case of public sector banks, including the State Bank of India.

The
ceiling of 24 per cent for FII investment can be raised up to sectoral cap/statutory
ceiling, subject to the approval of the board and the general body of the company
passing a special resolution to that effect. And the ceiling of 10 per cent for
NRIs/PIOs can be raised to 24 per cent subject to the approval of the general
body of the company passing a resolution to that effect.

The
ceiling for FIIs is independent of the ceiling of 10/24 per cent for NRIs/PIOs.

The
equity shares and convertible debentures of the companies within the prescribed
ceilings are available for purchase under PIS subject to:

-
the total purchase of all NRIs/PIOs both, on repatriation and non-repatriation
basis, being within an overall ceiling limit of (a) 24 per cent of the company's
total paid up equity capital and (b) 24 per cent of the total paid up value of
each series of convertible debenture; and

-
the investment made on repatriation basis by any single NRI/PIO in the equity
shares and convertible debentures not exceeding five per cent of the paid up equity
capital of the company or five per cent of the total paid up value of each series
of convertible debentures issued by the company.

Monitoring
Foreign Investments

The
Reserve Bank of India monitors the ceilings on FII/NRI/PIO investments in Indian
companies on a daily basis. For effective monitoring of foreign investment ceiling
limits, the Reserve Bank has fixed cut-off points that are two percentage points
lower than the actual ceilings. The cut-off point, for instance, is fixed at 8
per cent for companies in which NRIs/ PIOs can invest up to 10 per cent of the
company's paid up capital. The cut-off limit for companies with 24 per cent ceiling
is 22 per cent and for companies with 30 per cent ceiling, is 28 per cent and
so on. Similarly, the cut-off limit for public sector banks (including State Bank
of India) is 18 per cent.

Once
the aggregate net purchases of equity shares of the company by FIIs/NRIs/PIOs
reach the cut-off point, which is 2% below the overall limit, the Reserve Bank cautions all designated bank branches so as not to purchase any more equity
shares of the respective company on behalf of FIIs/NRIs/PIOs without prior approval
of the Reserve Bank. The link offices are then required to intimate the Reserve
Bank about the total number and value of equity shares/convertible debentures
of the company they propose to buy on behalf of FIIs/NRIs/PIOs. On receipt of
such proposals, the Reserve Bank gives clearances on a first-come-first served
basis till such investments in companies reach 10 / 24 / 30 / 40/ 49 per cent
limit or the sectoral caps/statutory ceilings as applicable. On reaching the aggregate
ceiling limit, the Reserve Bank advises all designated bank branches to stop
purchases on behalf of their FIIs/NRIs/PIOs clients. The Reserve Bank also
informs the general public about the `caution’ and the `stop purchase’ in these
companies through a press release.

The
current list of companies allowed to attract investments from FIIs/NRIs/PIOs with
their respective ceilings is:

List
of companies

List of companies
which have raised the ceiling from 10% in respect of NRIs investments under PIS (w.e.f. November 29, 2010)Upto
24%

1

Alembic
Chemical Works Co. Ltd.

2

Amar
Investments Ltd., Calcutta.

3

Anglo-
India Jute Mills Co. Ltd.

4

Arvind
Mills, Ahmedabad.

5

Ashima
Syntex Ltd, Ahmedabad.

6

Ashoka
Viniyoga Ltd.

7

Bharat
Nidhi Ltd.

8

BLB
Shares & Financial Services Ltd

9

BPL
Ltd.

10

Burr
Brown (India) Ltd

11

Camac
Commercial Company Ltd.

12

Ceenik
Exports (India) Ltd.

13

Cifco
Finance Ltd., Mumbai.

14

Classic
Financial Services & Enterprises Ltd, Calcutta.

15

CPPL
Ltd, (Reliance Ind. Infrastructure Ltd) Mumbai.

16

Crest
Communication Ltd.

17

CRISIL

18

DCM
Ltd.

19

DCM
Shriram Consolidated Ltd.

20

Dharani
Sugars & Chemicals Ltd

21

Dolphin
Offshore Enterprises ( I ) Ltd.

22

Emco
Ltd.

23

Essar
Oil Ltd.

24

Essar
Shipping Ltd., B’lore

25

Essar
Steel Ltd.

26

Eveready
Industries India Ltd.

27

Fabworth
(I) Ltd.

28

Federal
Bank Ltd.

29

Ferro
Alloys Corporation Ltd., Tumsar.

30

Gammon
India Ltd

31

Grasim
Industries Ltd.

32

GTL
Ltd.(formerly Global Tele-Systems Ltd.)

33

GTL
Infrastructure Ltd

34

Hamco
Mining & Smelting Ltd.

35

HCL
Infosystems Ltd.

36

HEG
Ltd

37

Hindustan
Development Corp. Ltd, Calcutta.

38

Hindustan
Nitroproducts (Gujarat) Ltd.

39

Hindustan
Transmission Products Ltd., Mumbai

40

HMG
Industries Ltd., Mumbai.

41

Housing Development and Infrastructure Limited

42

Indiabulls
Real Estate Ltd.

43

India
bulls Securities Ltd.

44

Indiabulls
Financial Services Ltd

45

Indiabulls Power Limited
(formerly Sophia Power Company Limited)

46

Igarashi
Motors India Ltd

47

IVP
Ltd

48

Jagatjit
Industries Ltd,

49

Jai
Parabolic Springs Ltd.

50

Jaysynth
Dyechem Ltd.

51

Jindal
Strips Ltd.

52

Jindal
Iron & Steel Co. Ltd.

53

Jindal Saw Limited (formerly Saw Pipes Limited)

54

JJ
Spectrum Silk Ltd.

55

Kartjikeya
Paper & Boards Ltd.

56

K
Sera Sera Productions Ltd

57

Lakhani
India Ltd.

58

M.P.
Agro Fertilisers Ltd., Bhopal.

59

Macleod
Russel (I) Ltd.

60

Matsushita
Television and Audio India Ltd.

61

Max
India Ltd

62

Mazda
Enterprises Ltd., Mumbai.

63

Media
Video Ltd.

64

Monnet
Ispat & Energy Limited

65

Multimetals
Ltd., Mumbai

66

Neha International Limited.

67

National
Steel Industries Ltd.

68

Nicholas
Laboratories India Ltd., Mumbai.

69

Networth Stock Broking Limited

70

Nava Bharat Ventures Limited

71

O.P.
Electronics Ltd., Mumbai.

72

Oriental
Housing Development Finance Corp. Ltd.

73

Pabacea
Biotec Ltd.

74

Padmini
Technologies Ltd.

75

Pearl
Polymers Ltd., New Delhi.

76

Piramal
Healthcare Ltd.

77

PNB
Finance & Industries Ltd

78

Rajath
Leasing & Finance Ltd.

79

Rajesh
Exports Limited

80

Rama
Petrochemicals Ltd.

81

Rama
Phosphates Ltd.

82

Reliance
Industries Ltd., Mumbai.

83

Rishra
Investment Ltd., Calcutta

84

Rossell
Industries Ltd., Calcutta.

85

Sahu
Properties Ltd

86

Sanghvi
Movers Ltd

87

Saurashtra
Paper & Board Mills Ltd.

88

Sayaji
Hotel Ltd.

89

SB
& T International Ltd

90

Sharyans
Resources Ltd.

91

Shanti
Gears Ltd.

92

Shibir
India Ltd., Calcutta

93

Shrenuj
& Company Ltd.

94

Shriram
Industries Enterprises Ltd., N. Delhi.

95

Silverline
Industries Ltd.

96

Sonata
Software Ltd.

97

SRF
Ltd.

98

Sterling
Lease Finance Ltd., Mumbai.

99

Sujana
Metal Products Ltd

100

Svam
Software Ltd.

101

Synthetics
and Chemicals Ltd., Mumbai.

102

Shrenuj & Company Limited

103

The
Champdany Industries Ltd., Calcutta.

104

The Dhanalakshmi Bank Limited

105

The
Dharamsi Morarji Chemical Co. Ltd .

106

The
Investment Trust of India Ltd.

107

The
Morarjee Goculdas Spinning & Weaving Co Ltd, Mumbai.

108

Tolani
Bulk Carrier Ltd.

109

Unitech Limited.

110

Uniworth
International Ltd.

111

Vaibhav
Gems Ltd.

112

Valecha
Engineering Ltd.

113

VisualSoft
Technologies Ltd.

114

Weltermann
International Ltd.

115

Woolworth
(India) Ltd.

116

Yes
Bank Ltd.

117

Zora
Pharma Ltd.

118

M/s. Redington(India) Ltd.(w.e.f. 29.11.2010)

119

M/s. Compuage Infocom Limited (w.e.f. 4.3.2011)

120

M/s. Kitex Garments Limited (w.e.f. 8.7.2011)

121

M/s Indiabulls Wholesale Services Ltd (w.e.f. 26.08.2011)

122

M/s Gitanjali Gems Ltd ( wef 16.09.2011)

123

Everonn Education Limited ( w.e.f 6.1.2012)

124

Indiabulls Infrastructure and Power Ltd ( w.e.f. 20.1.2012)

125

M/s Crew B.O.S. Products Limited (w.e.f. 16-1-2013)

126

M/s. Indiabulls Housing Finance Limited(w.e.f.19.03.2013)

127

M/s. Shilchar Technologies Limited(w.e.f. 20.03.2013)

Upto 17%

1

Garware
Shipping Corporation Ltd.

LIST
OF COMPANIES IN WHICH FII INVESTMENT IS ALLOWED UPTO 30% OF THEIR PAID UP CAPITAL
UNDER PIS

1

Asian
Paints (India) Ltd

2

Capital
Trust Ltd

3

Container
Corporation of India

4

Divi’s
Laboratories Ltd

5

Ferro
Alloys Corporation Ltd

6

Garware
Polyester Ltd

7

GIVO
Ltd (formerly KB & T Ltd)

8

Mahindra
Gesco Developers Ltd

9

Orchid
Chemicals and Pharmaceuticals Ltd

10

Penta
Soft Tec(Pentafour Communications Ltd)

11

Polyplex
Corporation Ltd

12

Ranbaxy
Laboratories Ltd

13

Shasun
Chemicals Ltd

14

Sonata
Software Ltd

15

The
Paper Products Ltd

16

Vikas
WSP Ltd

17

The ING Vysya Bank Limited (w.e.f. 03-01-2013)

LIST OF COMPANIES
IN WHICH FII INVESTMENT IS ALLOWED UPTO 40% OF THEIR Paid Up Capital